BONDS OF EXECUTORS AND ADMINISTRATOR
SECTIONS 6-7
SECTIONS 6-7
SECTIONS 6-7
SECTIONS 6-7
SECTIONS 6-7
SECTIONS 6-7
LSPU College of Law
RULE 86
CLAIMS AGAINST ESTATE
SECTIONS 1-2
What is a claim?
It is any debt or pecuniary demand against the decedent’s estate
SECTION 1. Notice to creditors to be issued by court.
Immediately after granting letters testamentary or of administration, the court shall issue a notice requiring all persons having money claims against the decedent to file them in the office of the clerk of said court.
EXPLANATION
Upon the death of a person, all his property is burdened with his debts, his death creating an equitable lien thereon for the benefit of the creditors. And such lien continues until the debts are extinguished either by the payment, prescription, or satisfaction in one of the modes recognized by law. Administration proceedings are therefore instituted to settle the estate of the deceased.
SECTION 2. Time within which claims shall be filed.
GENERAL RULE: Statute of Non-claims.
Within in the time fixed in the notice which shall not more than 12 MONTHS nor less than 6 MONTHS after the date of the FIRST PUBLICATION. Otherwise, they are BARRED FOREVER. Even if the testator acknowledged the debt in his will and instructed the executor to pay the debt, the statute of non-claims must still be complied with; otherwise the claim may also be barred.
EXCEPTION: Belated Claims.
Belated Claims are claims not filed within the original period fixed by the court. On application of a creditor who has failed to file his claim within the time previously limited, at ANY TIME BEFORE an order of distribution is entered, the court MAY, for cause shown and on such terms as are equitable, allow such claim to be filed within a time NOT EXCEEDING 1 MONTH from the order allowing belated claims.
EXPLANATION
The filing of claims contemplated therein should be during a period of 6 months starting from the 6TH MONTH after the date of the FIRST PUBLICATION of the notice up to the 12TH MONTH. Within the range of said period, the probate court is permitted to set the period for filing of claims and the period once fixed by the court is mandatory.
The court for good cause shown may grant a 1 month period for a creditor to file a claim which he failed to file during the original period granted for filing of claims. Such motion for leave to file a claim beyond original period may be file at any time during the administration proceedings provided no order of distribution has yet been entered.
The purpose of law, in fixing a period within which claims against the estate must be presented, is to ensure a speedy settlement of the affairs of the deceased person and the early delivery of the property to the person entitled to the same.
Statute of Non-claims supersedes the Statute of Limitations insofar as the debts of deceased persons are concerned. However, BOTH statute of Non-Claims and Statute of Limitations MUST CONCUR in order for a creditor to collect.
SECTIONS 3-5
SECTION 3. Publication of notice to creditors.
Every executor or administrator shall, immediately after the notice to creditors is issued, cause the same to be published three (3) weeks successively in a newspaper of general circulation in the province, and to be posted for the same period in four public places in the province and in two public places in the municipality where the decedent last resided.
SECTION 4. Filing of copy of printed notice.
Within ten (10) days after the notice has been published and posted in accordance with the preceding section, the executor or administrator shall file or cause to be filed in the court a printed copy of the notice accompanied with an affidavit setting forth the dates of the first and last publication thereof and the name of the newspaper in which the same is printed.
SECTION 5. Claims which must be filed under the notice. If not filed, barred; exceptions.
All claims for money against the decent, arising from contract, express or implied, whether the same be due, not due, or contingent, all claims for funeral expenses and expense for the last sickness of the decedent, and judgment for money against the decent, must be filed within the time limited in the notice; otherwise they are barred forever, except that they may be set forth as counterclaims in any action that the executor or administrator may bring against the claimants. Where an executor or administrator commences an action, or prosecutes an action already commenced by the deceased in his lifetime, the debtor may set forth by answer the claims he has against the decedent, instead of presenting them independently to the court as herein provided, and mutual claims may be set off against each other in such action; and if final judgment is rendered in favor of the defendant, the amount so determined shall be considered the true balance against the estate, as though the claim had been presented directly before the court in the administration proceedings. Claims not yet due, or contingent, may be approved at their present value.
SECTIONS 6-7
SECTION 6. Solidary obligation of decedent.
If the obligation is SOLIDARY, the creditor is mandated to file a claim against the decedent as if he were the only debtor (to collect the entire amount). If the creditor succeeds in collecting from the decedent debtor, the estate has the right to recover the respective contributions of the other debtors.
If the obligation is JOINT, the claim shall be properly limited to the portion owed by the decedent.
SECTION 7. Mortgage debt due from estate.
This section grants to the mortgagee three distinct, independent and mutually exclusive remedies that can be alternatively pursued by the mortgage creditor for the satisfaction of his credit in case the mortgagor dies, among them:
1. to waive the mortgage and claim the entire debt from the estate of the mortgagor as an ordinary claim;
2. to foreclose the mortgage judicially and prove any deficiency as an ordinary claim; and
3. to rely on the mortgage exclusively, foreclosing the same at anytime before it is barred by prescription without right to file a claim for any deficiency.
-
Notably, an election of one remedy operates as a waiver of the other.
SECTIONS 8-14
SECTION 8. Claim of an executor or administrator against the estate
-
Appointment of a Special Administrator
The special administrator will have authority to act only with respect to claims of the regular administrator.
SECTION 9. How to file a claim, contents thereof. Notice to executor or administrator
1. Deliver the claim with the necessary vouchers to the clerk of court;
2. Serve a copy thereof on the executor/administrator.
Contents of the claim:
1. If the claim be founded on a bond, bill, note or any other instrument:
a. the original need not be filed;
b. But a copy thereof with all the endorsements shall be attached to the claim, filed therewith,and served on the executor/administrator.
2. If the original is lost or destroyed:
a. The claimant must accompany his claim with affidavit or affidavits containing a copy or particular description of the instrument; and
b. Stating its lost or destruction.
3. If the claim is due:
a. It must be supported by an affidavit stating the amount due;
b. That no payments have been made thereon which are not credited; and
c. The fact that there have been no offsets to the knowledge of the affiant.
4. If the claim is not due or contingent, it must be accompanied by an affidavit stating the particulars thereof; and
5. When the affidavit is made by a person other than the claimant, he
must set forth in his affidavit the reason why it is not made by the
claimant.
SECTION 10. Answer of the executor or administrator, offsets
-
Within 15 days after service of a copy of the claim on the executor/administrator, he shall file his answer admitting or denying the claim and set forth the substance of the matters which are relied upon to support the admission or denial of a claim.
SECTION 11. Disposition of admitted claims
-
Any claim admitted by the executor/administrator shall immediately be submitted to the court who may:
1. Approve the same without hearing; or
2. The court in its discretion, before approving the claim, order that
known heirs, legatees or devisees be notified and heard.
SECTION 12. Trial of contested claim
The clerk of court shall set the claim for trial with notice to both parties upon:
-
Filing of an answer to a claim; or
-
Upon the expiration of the time for such filing. The court may refer the claim to a commissioner.
SECTION 13. Judgment appealable
-
Judgment of the court approving or disapproving a claim shall be filed with the record or the administrator proceedings with notice to both parties;
-
Judgment is appealable as in ordinary cases;
-
Judgment against the executor and administrator shall be that he pay in due course of administration, the amount ascertained to be due;
-
Judgment against executor and administrator shall not create any lien upon the property of the estate or does not constitute a specific lien which may be registered on such property.
SECTION 14. Costs
1. When executor and administrator in his answer admits and offers to pay part of the claim, and the claimant refuses to accept the amount offered:
a. If he obtains a more favorable judgment costs may be recovered by
him;
b. If he does not obtain a more favorable judgment costs may not be
recovered and he must pay to the executor and administrator
costs from time to time.
2. Where an action commenced against the deceased for money has been discontinued and the claim embraced therein presented as in this rule provided, the prevailing party shall be allowed the costs of his action up to the time of its discontinuance.